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C%&C re'$ired disclimer: &rding foreign exchnge on mrgin crries high level of ris"# nd
my not !e s$it!le for ll investors. &he high degree of leverge cn wor" ginst yo$ s well
s for yo$. (efore deciding to invest in foreign exchnge yo$ sho$ld cref$lly consider yo$r
investment o!)ectives# level of experience# nd ris" ppetite. &he possi!ility exists tht yo$
co$ld s$stin loss of some or ll of yo$r initil investment nd therefore yo$ sho$ld not invest
money tht yo$ cnnot fford to lose.
C%&C *+,- 4.41 . /ypotheticl performnce res$lts hve mny inherent limittions. No
representtion is !eing mde tht ny cco$nt will or is li"ely to chieve profits or losses similr
to those shown. 0n fct# there re fre'$ently shrp differences !etween hypotheticl
performnce res$lts nd the ct$l res$lts s$!se'$ently chieved !y ny prtic$lr trding
progrm. 1ne of the limittions of hypotheticl performnce res$lts is tht they re generlly
prepred with the !enefit of hindsight. 0n ddition# hypotheticl trding does not involve
finncil ris". 2ri!les s$ch s the !ility to dhere to prtic$lr trding progrm in spite of
trding losses s well s mintining de'$te li'$idity re mteril points which cn dversely
ffect ct$l rel trding res$lts.
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Content
Introduction 4
Overview 3
Section 1 Trends
&he 4yth 1f 4r"et &rend 5
/ow &o 0ncrese &he Profit!ility 1f Any 6ystem 7
/ow &o 8etermine &he &rend 10
9ht 0s A &rend 8rwdown 1:
Protecting Aginst 2oltility 14
-xercise 15
&he +ltimte 6ol$tion 17
Section 2 Patterns
/ow &o 8rw &rend ,ines 1;
-xmples: <ood &rend ,ines 2s. (d &rend ,ines 20
=&ringles# %lgs# 9edges...> 22
/ow &o &rde Chrt Ptterns 24
-xercise 27
*ecogni?ing Chrt Ptterns :1
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Introduction
&his report ws written to ill$minte the top mis$nderstood %orex res nd
help %orex trders s$cceed nd sty profit!le. &he informtion is presented in
red!le wy for !eginners s well s dvnced trders tht wnt to t$ne $p
their trding pproch nd increse their s$ccess rte. @o$ will lern !y
stressing the common mist"es nd often reveling o!vio$s !$t $nderestimted
trding techni'$es.
4ost trders strt !y s"ing the correct '$estion: =9htAs the c$rrent mr"et
trendB># !$t then most of them fil to determine the trend correctly nd lmost
ll trders miss the next importnt '$estion: =/ow reli!le is the c$rrent
trendB>
0f yo$ donAt t"e the trend into cco$nt# yo$ will often !e tric"ed into plcing
low winning.pro!!ility trdes. &rend is yo$r friend. (y following the trend it
cn only !e !etter. ($t yo$ hve to disting$ish !etween the rel trend nd very
tempting price ction tht wnts to ply with yo$r emotions.
@o$ will lso $nderstnd the !sic principles !ehind chrt ptterns# how to drw
strong trend lines# how to recogni?e the ptterns nd how to trde them. 9e
lwys "eep trding simple nd therefore we foc$s only on the most reli!le
chrt ptterns. 9ith the following "nowledge# yo$ will !e !le to spot the
ptterns leding to explosive price movements nd then trde profit!ly with it.
-n)oyC
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Overview
9e will cover two different !$t close res tht ll s$ccessf$l trders hve
mstered:
Section 1 Trends
&he =!$y nd hold> strtegy is ded tody. 8o mr"et trends existB
&he common pproch in ll trend following systems
&r$e story: simple trding system tht mde fort$ne for one fmo$s
trder nd his investors
1ne =tric"> tht will m"e the difference !etween losing Dor !re"ing.
evenE nd winning
&he common mist"e: seemingly =strong $ptrend> is followed !y hrd
fll
/ow to identify the rel trend $sing p$re price ction
9hich trend is more reli!le nd how to comp$te the trend reli!ility
Another common mist"e: 6top ,oss not reflecting the c$rrent mr"et
voltility
9hich mr"ets to void nd how reli!le trends increse s$ccess rte
Section 2 Patterns
&he g$idelines to drwing good trend lines. (re"ing thro$gh strong
trend line res$lts in mssive nd profit!le move.
6everl exmples of good nd !d trend lines nd the common mist"es
=&ime !om!s> constr$cted !y trend lines
&he definite strtegy to enter n order# plce yo$r 6top ,oss nd t"ing
profit
+sing the =Pro)ection 4ethod> to determine the =&"e Profit> Point
0ntelligent softwre tht cn recogni?e strong trend lines nd chrt
ptterns
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Section 1 Trends
The myth of market trend
&rend following hs !een the !est style of trding for the pst :0 yers. &here
were times when trders mde fort$nes )$st !y following the trend or following
simple system !sed on two moving verges crossover. &he =!$y nd hold>
strtegy tht ws so pop$lr !y trders !o$t decde go is ded tody.
,oo" t the -+*F+68 chrt from Gn$ry 2001 $ntil G$ly 200H. &he $ptrend ws
pretty strong most of the time. 0f yo$ p$shed the =($y> !$tton# yo$ wo$ld win
most of the time even with poor trding system. &he consistent rise of the
e$ro over the dollr ws giving yo$ cler sense of the overll trend.
6ince G$ly 200H# it loo"s li"e everything hs chnged. &he trend direction is
$ncler# no!ody "nows wht is going to hppen next nd people re serio$sly
prepring for the coming collpse of the single -$ropen c$rrency. (y the wy#
for $s D%orex trdersE it wo$ld !e nothing !$t nother opport$nity to m"e
profit# so "eep smiling.
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8oes it ll men tht mr"ets re not trending todyB 1f co$rse they re
trendingC &rends exist nd they cn !e trded $p nd down for profit. &here will
lwys !e short.term trends in ny mr"et# the only '$estion is whenC 6o# the
!ig '$estion isI>how do we find the !est trending mr"et nd not miss the
opport$nity of t"ing trding signls in the direction of strong trendB> @o$ will
find definite nswer soon.
&he !elief tht trend following is n o$tdted trding techni'$e is only prtilly
tr$e. 0t is tr$e tht there is hrdly ny mr"et with cler overll trend direction.
@o$ co$ld follow the temporry trend only if you are able to determine the
trend correctly. &his is the point where so mny trders fil. A pir moving $p
on :0.min$te time frme cn ct exctly contrry on n ho$rly time.frme.
-ven if yo$ find rre coincidence c$rrency pir moving in the sme
direction on ll time frmes yo$ still need to "now =how well the market
is trendin to void very short.term trends. &he sol$tion is smrt nd simple.
!ow to increase the "rofitability of any system
(efore yo$ discover the most simple nd effective method to determine the
trend# letAs see wht itJs good for. All the trend following systems re !sed on
one common pproch:
=($y the dips in n $ptrend nd sell the rllies in downtrend.>
,etAs revel one simple trding system tht ct$lly mde fort$ne for one
fmo$s trder nd his investors. &he system =8onchin 3 K 20> is nmed fter
him. /ere is the set.$p.
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0n the chrt !ove# yo$ see two indictors L the !l$e line nd the red line. &he
!l$e line is the indictor 64A 3 Dstnds for simple moving verge with period
3E nd the red line is 64A 20 Dsimple moving verge with period 20E.
8onchinAs ide ws very simple:
1# $uy when the blue line crosses the red line u"wards
2# Sell when the blue line crosses the red line downwards
-ven 3.yer old child co$ld do thisC Act$lly# there is nothing specil !o$t
this system. All trend following systems re li"e this. 6ome systems re more
dvnced# with more sophisticted indictors# !$t the common pproch is to
!$y the dips nd sell the rllies.
If everyone could do this% then what&s the money makin secret'
&he nswer is tht 8onchin $sed this system in strong !$ll mr"ets. @es#
trending mr"etsC &his importnt note is the "ey to consistent profits s
ill$strted in the chrt !elow.
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&he first trde ws profit!le !ec$se it ws mde in the direction of the strong
trend. &he next trdes led to losses s the mr"et ws t$rning $p nd down
witho$t cler direction. Profits mde in the first trde wo$ld !e t"en !c" in
series of losses.
/ow 8onchin delt with it ws smrt. /e ignored ll trding signls when the
red line ws not going $p on t lest 43 degree ngle. /e wo$ldnAt t"e ny
losing trdes fter the first trde !ec$se the red line is not trending t ll. 0t is
in so clled choppy ?one. 6o why ws 8onchin !le to m"e fort$ne from
s$ch simple system while others co$ld notB (ec$se others wo$ld throw this
system wy s not profit!leC &he only =tric"> ws to follow good trend nd
not t"ing ny other trdes.
(hat is the lesson from this story'
0f yo$ "now how to determine the mr"et trend correctly# it co$ld m"e
difference !etween losing or !re".even nd winning. 8onchin $sed simple
moving verge to determine the trend nd filter trding signls.
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1. 9hen the mr"et ws trending# he t$rned his system on.
2. 9hen the mr"et ws in choppy ?one# he t$rned his system off nd
ignored ny trding signls.
9ht yo$ cn do is )$st the sme with ny trding system or ro!ot.
8etermining the trend $sing simple moving verge cn !e replced with
more sophisticted# verstile techni'$e tht yo$ will lern in the next pges.
!ow to determine the trend
6ome people lern from their mist"es# !$t smrt people lern from other
peopleAs mist"es. 6o letAs strt with exmples of wrong !$t very common
pproch to mr"et trend nlysis.
9ht yo$ see in this chrt is explosive price movement tht is $s$lly the res$lt
of news relese. All !ro"ers# pltforms nd vrio$s c$rrency tools re
indicting =strong $ptrend># tempting people to )$mp in nd m"e profit.
9ht hppens next is# t !est# choppy ?one# or hrd fll.
9ht is ct$lly in the chrt re few consec$tive long green cndlestic"s. &his
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is not rel trend# !$t immedite price ction# tempting trders to initite
trdes nd experience costly nd pinf$l exercise. &o void flling into this
trp# yo$ need to foc$s on longer trends. &his is wht rel trend loo"s li"e:
&he price is consistently rising with no s$dden chnges or explosive
movements. @o$ cn expect tht this trend will contin$e nd yo$ sho$ld t"e
only !$llish signls. 1!vio$sly the trend wonAt lst forever nd yo$ cn even
hve !d l$c" !y entering the mr"et t the end of the trend# !$t the odds
work for you. 0t simply cnnot !e !etter. &here re 100s of free or proprietry
indictors to identify the trend !$t !elieve or not# no indictor is !etter thn the
h$mn eye. As Al!ert -instein sid:
=4"e things s simple s possi!le# !$t not simpler.>
Now letAs revel the esy !$t the most effective method to identify the trend.
1. Moom the chrt inFo$t to show !o$t 200 !rs. Notice tht 200 !rs on
dily chrt Dor 200 trding dysE correspond to 1 yer.
2. Connect the lower left corner with the $pper right corner. 0f the line
overlps with the price !rs severl times Dthe more times# the !etterE#
yo$ hve fo$nd reli!le $ptrend. 6ee the exmple !elow.
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:. Connect the $pper left corner with the lower right corner. 0f the line
overlps with the price !rs# yo$ hve fo$nd reli!le downtrend.
As yo$ see# the mr"et is li"e se wve nd it "eeps on going $p nd down.
6ometimes the dips re too deep to consider it reli!le $ptrend# or the rllies
re too high to consider it reli!le downtrend. Nnowing the =trend reli!ility>
is the "ey to discover the real and reliable trend. 6o# how do we determine if
the trend is reli!le# or whether it is !etter to sty offB &he !est wy is to forget
ny lgging indictors# !$t to $se p$re price ction.
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(hat is a trend drawdown
&rend drwdown is comp$ted from p$re price ction nd so is the !est wy to
determine the trend reli!ility. 0t simply tells yo$ how deep the price went
ginst the c$rrent trend. @o$ will pprecite this method in the next prgrph
=Protecting ginst voltility>.
Now# t"e loo" t the chrt !elow.
&he !l$e line indictes the deepest move ginst the c$rrent trend. 0n this
exmple it is 2:: pips. &he whole move in this chrt is HH2 pips.
&he trend drwdown is:
2:: F HH2 O cc 25P
Not !d. Conservtive trders wo$ld prefer the trend drwdown to !e !elow
20P s it is more reli!le. &he Q!ig dogsJ prefer trends with drwdown even
!elow 13P. 6$ch trends exist lmost every dy in t lest one %orex chrt.
&rends with drwdown !elow 10P re very rre# !$t when they pper# they
re gold mines L yo$ cn esily chieve winning percentge !ove ;0P.
&he lower trend drwdown O the more reli!le trend O the greter s$ccess rte
O the more consistent profitC
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One more im"ortant note)
/ow mny !rs sho$ld we $se to define the trendB 9e hve $sed 200 !rs in
the exmples !ove. 0t is compromise L not too m$ch# not too little. 0f yo$
were to $se only 20 !rs# yo$ wo$ld ris" entering the short.term explosive
mr"et movements which re not rel trends s we hve explined !ove. 0f
yo$ were to $se 300 !rs# yo$ wo$ld hrdly find ny c$rrency chrt with trend
drwdown !elow 20P. (efore we show yo$ how to systemticlly pic" the !est
trending pirs nd time frmes every dy# letAs loo" t how to $se the trend
drwdown in the most importnt spect of trding L $sing 6top ,ossC
Protectin aainst volatility
,oo" t the chrt !ove. &he trder who plced the 6top ,oss right fter
entering the mr"et deserves gret ppl$se !$t the pro!lem is# the 6top ,oss
is too tightC <ive the mr"et eno$gh spce to !reth or the 6top ,oss will !e hit
very '$ic"ly.
6ome trders $se fixed n$m!er of pips# something li"e 30 pips or 100 pips...
this is !dC 6top ,oss hs to reflect the c$rrent mr"et voltility. As" yo$rself:
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=when did the price go s deep s my 6top ,ossB> 0f it hs hppened severl
times in the c$rrent chrt# why wo$ld yo$ thin" yo$r 6top ,oss will not !e hit
nowB
The ideal Sto" *oss should be reater than the trend drawdown#
,isten to the mr"et# not to the pips. 0n the exmple !ove# the 6top ,oss
sho$ld !e t lest 2:: pips. &oo m$chB 9ell# $se smller lot si?e. 0f yo$ trde
1 minilot nd R2:: is !ove yo$r ris" tolernce# then $se microlots. 1r donAt
t"e the trde. &he worst thing yo$ cn do is $se smll pip vl$e )$st !ec$se
yo$ wnt smll ris". Act$lly# yo$ wo$ld ris" more !ec$se if yo$ donAt give
the mr"et eno$gh spce to !reth# the 6top ,oss wo$ld li"ely !e hit regrdless
of how good yo$r trding system Dor reli!le the trendE is.
@o$ wo$ld do well if yo$ wo$ld $se the trend drwdown S 1 pip s the pip
vl$e for the 6top loss D2:: S 1 O 2:4 pips in the exmpleE. 0f yo$ wnt to
increse the s$ccess rte !$t on the other side# increse the ris" when
compred to the profit potentil# yo$r 6top ,oss sho$ld !e set t m$ch sfer
1.3 x trend drwdown.
Sto" *oss + 1#, - trend drawdown + 1#, - 2.. "i"s + cca .,/ "i"s
6ome trders wo$ld prefer even 2 x trend drwdown O 455 pips. 6$ch 6top
,oss wo$ld !e sfe eno$gh from the wild mr"et. 0tAs ll !o$t sttistics.
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0-ercise
Now itAs time for little exercise. /ere re two chrts with o!vio$s $p nd
down trends.
&he mxim$m drwdown indicted !y the !l$e line strts from the high t
7H.55 nd ends t the low t 7H.1H. &he trend drwdown in pips is:
12#33 12#12 + /#42 542 "i"s6
Now letAs clc$lte the percentge drwdown. &he visi!le $ptrend strts from
the low t 75.05 nd the mxim$m high is t 7;.30.
&he overll move in the c$rrent chrt is:
17#,/ 13#/3 + .#44 5.44 "i"s6
&he percentge drwdown is:
42 8 .44 + cca 149
No do$!t# the trend with drwdown !elow 13P is solid. Plce the 6top ,oss t
lest 4; pips !elow the initil entry point.
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0n the next chrt# there is downtrend.
&he trend drwdown in pips is:
1#./3, 1#27,, + /#/11/ 511/ "i"s6
Now letAs clc$lte the percentge drwdown. &he visi!le downtrend strts
from the high t 1.:2H: nd the mxim$m low is t 1.25H2. &he overll move
in the c$rrent chrt is:
1#.22. 1#2322 + /#/3/1 53/1 "i"s6
&he percentge drwdown is:
110 F 501 O cc 1HP
&he trend reli!ility is moderte. Plce the 6top ,oss t lest 111 pips !ove
the entry point.
The ultimate solution
8iscipline nd ptience re the two "ey points to s$cceed in the %orex mr"et.
6top h$nting the mr"et for every potentil trde. Prepre !efore trding.
6cnning few c$rrency pirs on ll time frmes cn t"e yo$ !o$t 13
min$tes# !$t the conse'$ences re invl$!le. Pic" only the !est trending
c$rrency pirs nd time frmes nd ignore ll other $npredict!le movements.
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&rde less# profit more. A few g$idelines:
1. Trade only if the trend drawdown is below 2/9#
Dprefer!ly !elow 13PE.
2. If the trend drawdown is below 1,9# yo$ cn !e consistently
profit!le even with simple trding system s$ch s =8onchin 3 K 20>
Dpge 5E.
3. If the trend drawdown is below 1/9# yo$ hve fo$nd gold mineC
@o$ cn simply enter the mr"et in the trend direction with ;0P
s$ccess rte.
&he :ore- Trendy $ltimte sol$tion scns :4 %orex pirs on ll time frmes for
yo$ every second. 0t clc$ltes the trend drwdown for ech chrt nd shows
the most reli!le trends sorted !y reli!ility !sed on yo$r preferences.
Clic" here to wtch video how it wor"s
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Section 2 Patterns
!ow to draw trend lines
4ost trders thin" tht drwing trend lines is ll !o$t connecting vrio$s highs
nd lows. 9itho$t proper "nowledge K experience# yo$ wo$ld see them
everywhere# however not ll trend lines sho$ld !e considered. 0f yo$ follow the
g$idelines to drwing good trend lines# there is high chnce tht the price will
respect yo$r trend line nd get repelled !y it# or it will !re" thro$gh the trend
line res$lting in mssive nd profit!le move. ,etAs strt with some !sics.
1. &he u""er trend line D!l$eE connects t lest two lower highs# so it is
sloping down.
2. &he lower trend line D!l$eE connects t lest two higher lows# so it is
sloping $p.
3. &he red trend line in the chrt is little controversil when it comes to
disc$ssion. 0t is o!vio$sly n $pper trend line Dconnecting two highsE#
!$t it is sloping $pC 6$ch trend line lone is not vlid $nless we del
with =9edges> nd =%lgs> s yo$ will see in the next pges.
*emem!er: n $pper trend line is sloping down# while lower trend line is
sloping $p.
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0-am"les) ;ood Trend *ines vs# $ad Trend *ines
9hen the price !re"s thro$gh strong trend line# it goes f$rther# offering yo$
gret profit potentil. @o$ cn drw mny trend lines in one single chrt# !$t
there re severl g$idelines to choose only the strongest trend lines:
1. Prefer trend lines with more than two touchin "oints#
D&rend lines !ecome stronger the more times they re testedE.
2# The touchin "oints should not be too close toether#
:. *oner trend lines are stroner than shorter trend lines# ,onger
trend lines re lso seen on the $pper time frmes# so more trders re
wre of them.
0n the exmple !ove the to$ching points re very close together forming n
$nreli!le trend line. &here is no other to$ching point on the rest of the trend
line.
0n the next exmple !elow# the two to$ching points re not so close together#
!$t the trend lines re too short. < ood trend line should be at least ,/
bars lon. &here exist m$ch !etter $pper nd lower trend lines in this chrt s
shown in the previo$s pge.
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=ow let&s see some ood trend lines>
&he trend line !ove hs : to$ching points nd cn !e considered s m$ch
stronger thn trend lines in the previo$s exmples. &he points re evenly
distri!$ted nd the trend line is long eno$gh. All three g$idelines re met
perfectly.
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Now this trend line is monsterC 0t is long eno$gh with 3 to$ching points. @o$
my notice tht there re two gro$ps of two points tht re too close together#
!$t this is not pro!lem s long s the other points meet the g$ideline. Treat
a rou" of close "oints as one ?bi "oint#
?Trianles% :las% (edes###
Now tht yo$ "now how to drw trend lines# yo$ re one step wy from
discovering the oldest mr"et phenomenon: chrt ptterns. @o$ re !o$t to
lern incredi!ly reli!le price formtions tht hve time nd time gin provided
$s with consistent profits.
&he $pper nd lower trend lines re forming trianle s seen in the next
chrt. As the price is oscillting !etween the two !o$nding lines# the !$yers nd
sellers re in t$g of wr# nd event$lly the price will !re" thro$gh one of the
lines L no!ody "nows which oneC 0n the next pges yo$ will lern how to
prticipte in this explosive move.
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:allin wede is li"e tringle# !$t !oth trend lines slope down. *ecll tht the
!ottom line lone wo$ld not !e vlid trend line. @o$ !egin !y drwing the
$pper trend line nd then yo$ complete the wedge or tringle Dit depends on
which line hs more to$ching pointsE.
1ne importnt note: the u""er and bottom trend lines must convere so
that the "rice is bein s@ueeAed#
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&he flg pttern is encompssed !y two prllel lines. &he price is not s'$ee?ed
!y the trend lines# !$t it is moving inside the chnnel formed !y the trend lines.
:las are usually seen as the market "auses after a bi move before
continuin its main trend#
All the presented ptterns !ove re in n $ptrend. &he $ptrend does not need
to !e perfect# the price !efore the pttern is )$st rising. Chrt ptterns fter
downtrend re similr. 9e will foc$s only on contin$tion ptterns# tht is#
!$ying in n $ptrend nd selling in downtrend. @o$ my her !o$t reversl
ptterns# !$t trding ginst the trend re'$ires lot of experience. 4ny !n"s
hve crshed nd mny fort$nes were lost !ec$se of st$!!orn trders trying
to pic" the tops nd !ottoms. &rend is yo$r friend# so "eep it simpleC
!ow to trade chart "atterns
Now itAs time to revel the definite strtegy to enter n order# plce yo$r 6top
,oss nd t"e profit# so yo$ donAt need to wtch the mr"et nd yo$ donAt let
yo$r emotions control yo$r trding.
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The best way to enter the market is by
usin ?Sto" Orders and ?*imit Orders#
9hen the orders re plced# they re locted on the !ro"erAs server# so yo$ cn
sfely leve yo$r trding pltform. &his !rings yo$ freedom from trying to spot
the !est entry point.
&he entry r$le is simple:
1. 0f yo$ trde pttern in n $ptrend# "lace a $uy Sto" Bust above the
u""er trend line# 9here exctlyB @o$ my wnt to plce it 3 pips
!ove the trend line to spot the rel !re"o$t. &he dvnced pproch is
to reflect the mr"et voltility s we will disc$ss it lter.
2# Place a Sto" *oss Bust below the lower trend line#
:. 0f yo$ trde pttern in downtrend# yo$ do )$st the opposite L plce
6ell 6top order !elow the lower trend line nd 6top ,oss !ove the
$pper trend line. 4ore in the -xercise.
&he interesting prt is when to &"e A Profit. 4ny trders enter the trde
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!lindly witho$t ny ide where to exitC Notice tht the 6top ,oss !elow the
trend line reflects the c$rrent mr"et voltility. 0t is not Dnd never sho$ld !eE
fixed n$m!er of pips. &he sme sho$ld hold for the &"e Profit. @o$ cnnot )$st
decide tht 30 pips is eno$gh nd yo$ wo$ld exit the position. 30 pips is very
different on min$te time frme nd dily time frme.
There are two reat methods to find the Take Profit level)
1. ProBection method L esy
2. :ibonacci method L $sing severl &"e Profit levels# little complex#
!$t !etter
,etAs foc$s on the first oneT The ProBection Cethod.
1. 4es$re the gretest width of the pttern.
2. &his pip vl$e will !e $sed for the &"e Profit.
+se the sme method for tringles# wedges# flgs or single trend lines. As the
mr"et !re"s from the choppy ?one# it normlly trvels t lest the pro)ected
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distnce.
1ne note !o$t the flas and wedesD
As the price trvels !etween the !o$ndry lines# it hppens tht the trend line
is not !ro"en nd the pttern !ecomes deeper# or even no more vlid. 0n s$ch
cse cncel the order nd plce new one to reflect the c$rrent sit$tion.
6ometimes the sit$tion is not going s yo$ hd plnned nd the price !re"s
thro$gh the other trend line. &hen simply cncel the order nd forget the
pttern. *ther not t"ing the trde thn t"ing !d trde is the "ey of
s$ccessf$l trding. &here will !e plenty of other opport$nitiesC
Neep in mind tht chrt ptterns cn pper nd dispper# or morph into
nother ptterns. An emerging pttern is not confirmed $ntil the relevnt trend
line is !ro"en.
0-ercise
%irst# letAs loo" t the clen chrt !elow. &here re severl significnt highs nd
lows tht cn !e connected with trend line. (efore the choppy ?one we see
minor $ptrend# so we re going to complete the pttern nd plce !$y order.
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&here is )$st one wy to drw the two trend lines tht meet the g$idelines.
&hese trend lines re forming tringle pttern.
1. Place a $uy Sto" order Bust above the u""er trend line.
2# Place a Sto" *oss Order Bust below the lower trend line#
:. &he distnce of the highest high nd the lowest low of the pttern is ;:
pips# so this is the pip vl$e for the &"e Profit.
As the pttern contin$es to grow# yo$ cn replce the ($y 6top order !it
lower to the trend line# !$t itAs not necessry. %inlly# the $pper trend line is
!ro"en# the ($y 6top order is exec$ted nd the &"e Profit is hitC
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<nother e-am"le)
A minor downtrend is preceding some pttern. &he lower trend line is o!vio$s.
9ht !o$t the $pper trend lineB 0tAs not completely o!vio$sT there re severl
wys to complete the pttern into tringle# wedge or flg. 9e wo$ld prefer
flg !ec$se tringle or wedge wo$ld !e too wide nd the &"e Profit wo$ld !e
too fr D$nless yo$ $se more complex %i!oncci techni'$e for severl &"e
Profit levelsE.
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Now the well."nown techni'$es re mde in the opposite direction:
1. 6ell 6top order !elow the lower trend line#
2. 6top ,oss !ove the $pper trend line#
:. Pro)ected &"e Profit.
&he trend line is !ro"en# the 6ell 6top order is exec$ted nd we m"e money in
downtrend $ntil the &"e Profit is hit. As we $se single &"e Profit level# the
downtrend contin$es witho$t $s... let it o>
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EeconiAin chart "atterns
Professionl trders $sed to nly?e chrt fter chrt to find reli!le ptterns on
dily nd even intrdy time frmes. &ody# comp$ting power comes into ply.
:ore- Trendy is softwre sol$tion !le to recogni?e chrt ptterns on ll
chrts every secondC
.4 :ore- "airs - 7 time frames + ./3 charts>
0t hs n intelligent lgorithm to recogni?e strong trend lines nd discover the
most reli!le chrt ptterns t the c$rrent time. @o$ will lern more techni'$es
!o$t chrt ptterns in the mem!ership s$!scription:
+sing %i!oncci techni'$e for m$ltiple &"e Profit levels
&rding =p$ll!c"s> !y $sing ,imit 1rders for !etter entry point
/ow mr"et voltility is $sed to filter flse !re"o$ts
And more s$pertipsC
Clic" here to wtch video !o$t $tomted chrt pttern recognition
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